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Car Warranties: What You Need to Know (2022) - Insurify

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Anna Baluch

By: Anna Baluch

Edited by Jackie Cohen

Last Updated June 15, 2022

Why you can trust Insurify

Insurify partners with top insurance companies and is a licensed agent in all 50 states. However, the insurance experts writing our content operate independently of our partners. Check out reviews from over 3,000 satisfied customers, how we make money, our data methodology, and our editorial standards.

A vehicle is likely one of your largest investments. No matter what type of car you have, it’s bound to need repairs eventually. With a car warranty, you can protect yourself from having to pay out-of-pocket fees for costly car repairs. It can give you some much-needed peace of mind.

Car insurance is just as important as a car warranty. To find the right policy for your unique budget and needs, check out this car insurance quote-comparison tool. You can receive personalized auto insurance quotes in minutes. Best of all, there are no fees or sign-ups involved.

Quick Facts

  • While a manufacturer’s warranty will usually come with a new car, you’ll need to purchase an extended warranty.
  • Warranties cover mechanical breakdowns for a certain amount of years or miles.
  • Since warranties come with varying levels of coverage, be sure to read a warranty’s terms and conditions so you understand the covered repairs before you commit.

What is a car warranty?

Is a car warranty the same as insurance?

Car insurance and car warranties are different. While insurance protects covered damages after an accident, a car warranty covers repair and replacement costs due to malfunctions.

You can think of a car warranty as a vehicle service contract between you and your manufacturer, dealership, or third-party warranty provider. It states that they will cover the costs when a faulty part or workmanship flaw prevents one of your vehicle’s components from working as it should.

Since there are many types of warranties available, it’s important to read the terms and conditions of your unique warranty. Find out what’s covered and what’s not. Also, understand when your warranty expires. This way, you can avoid unwanted surprises down the road.

When you buy a new vehicle, a manufacturer’s warranty will be included. But other warranties, such as extended car warranties, are extra. You can choose to purchase them and expect to pay thousands for them.

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How does a car warranty work?

Car warranties, which are sometimes called vehicle protection plans or vehicle service contracts, are quite simple. If you have a vehicle repair that you believe is covered by your warranty, you can submit a claim to the warranty company. They will then determine whether the repair is covered.

If it is, you’ll take your vehicle to an approved repair facility that will complete the auto repair. While every car warranty is unique, the best ones will pay the repair shop up front and won’t require you to cover the costs and wait to get reimbursed. Note that depending on your warranty, you might be required to pay a deductible.

What does a car warranty cover?

In general, a car warranty covers defects or damage that occurs to one of its components during normal use. These components may include the engine, fuel system, gearbox and clutch, steering mechanisms, brakes, electrical systems, and air conditioning. There are also warranties that include other perks like roadside assistance to help you out if you get stranded on the road and require emergency help.

When you shop around for warranties, you’ll find that some cover many parts while others have more exclusions. Of course, the ones that offer more comprehensive coverage tend to be more expensive than warranties with basic coverage.

What won’t a car warranty cover?

When you buy a car, you can’t expect it to remain in optimal condition forever. You should realize that its parts will wear out over time, no matter how new or luxurious it is. Unfortunately, car warranties do not cover normal wear and tear. Instead, they pay to replace the parts that you need to replace ahead of time.

For example, brake pads need to be replaced every 25,000 to 65,000 miles. It’s unlikely that a car warranty will cover the cost to replace them when you hit 25,000 miles. Also, a car warranty won’t pay for other parts that will likely wear down from regular use, like brakes, windshield wipers, and headlight bulbs.

Routine maintenance like oil changes and tire rotations isn’t usually covered either. In addition, dings and scratches in the paint and damage from an accident or environmental factors like hail, wind, and vandalism are rarely paid for by warranty companies.

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Types of Car Warranties

There are various types of car warranties available. Here’s a brief overview of some of the most common ones.

Manufacturer’s Warranty

When you first buy a car, there’s a good chance it’ll come with a manufacturer’s warranty. Also known as a factory warranty, it’s the automaker’s promise that in the event your vehicle experiences certain issues within a certain period of time or miles, it will repair them for you.

In most cases, a manufacturer’s warranty will cover major vehicle parts and systems like the engine, air conditioner, and alternator. Manufacturer warranties vary based on the car’s manufacturer and warranty type.

Extended Warranty

The purpose of an extended warranty from a company like CARCHEX, Endurance, or American Auto Shield is to take over a manufacturer’s warranty once it expires and cover similar parts and electrical components. Since it won’t come with your vehicle, you’ll need to purchase it separately.

The major benefit of this type of warranty is that you can pick and choose what you’d like covered. It’s far more flexible than a manufacturer’s warranty, so you shouldn’t have any issues finding the best extended car warranty for your particular needs.

Depending on the extended warranty you choose, you may enjoy a variety of benefits like towing, rental car reimbursement, key fob replacement, and/or roadside assistance. Trip interruption service might be included as well.

Bumper-to-Bumper Warranty

A bumper-to-bumper warranty is known as the most comprehensive warranty available, as it can give you complete auto protection. Also called an exclusionary warranty, it typically lasts for three years or 36,000 miles.

It covers almost every component between your car’s front and rear bumpers. These components include braking, steering, powertrain, suspension, climate control, electrical systems, and high-tech features.

While bumper-to-bumper warranties vary by manufacturer and aftermarket warranty company, most exclude the same items. In most cases, they don’t pay for any damage that results from a lack of maintenance or environmental factors. Cosmetic damage isn’t usually covered, either.

Powertrain Warranty

Since it can be very expensive to repair parts of your powertrain or the most important mechanical system in your car, a powertrain warranty can come in handy. It protects your vehicle’s powertrain, which includes the engine, transmission, axles, driveshafts, seals, gaskets, and more. The typical length of most powertrain warranties is five years or 60,000 miles.

Corrosion Warranty

A corrosion warranty is designed to cover the costs of rust damage. There are two types of corrosion warranties: rust perforation coverage and surface corrosion coverage. While a rust perforation coverage plan only pays for vehicle damage if the related component has completely rusted through, surface corrosion coverage applies as soon as you notice rust.

Accessory Warranty

Accessory warranties are designed to cover a variety of auxiliary vehicle systems and interior vehicle components. Typically, they enhance coverage on seat belt restraints, airbag deployment units, and other safety systems. There are more comprehensive accessory warranties, which might also protect fabrics, paneling, and sound equipment inside of your car.

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Car Warranty vs. Car Insurance

While car warranties are optional, car insurance is required for car owners in most states. A vehicle warranty is intended to assist with manufacturing defects and mechanical repairs on your vehicle. It won’t, however, cover any damages caused to others that you’re responsible for. That is the purpose of basic liability car insurance.

Liability car insurance usually pays for post-accident medical bills and repairs. There are more comprehensive car insurance plans that may reimburse you for vehicle damages, but there’s no such thing as a car warranty that will protect you against damages to other vehicles and people.

Read the Fine Print

When you explore different car warranties, pay close attention to their conditions and exclusions. If you’re not aware of them, you might invalidate your warranty and lower your chances of making a successful claim.

You might invalidate your auto warranty if you fail to service or maintain your vehicle as you should. Making changes to your car, filling it with the wrong type of gas, and continuing to drive when you know there’s an issue can all be used against you when you want to take advantage of your warranty.

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Shop Around for the Best Car Warranties

When you buy a new car, check to see if it’ll be covered by the manufacturer’s warranty. If you decide to purchase an extended warranty to reduce expenses once your manufacturer’s warranty is up, look into all your options, and choose the one that makes the most sense for your budget and preferences.

While it may be tempting to purchase an extended warranty from a dealer, you might be able to find a better deal through a third-party car warranty company that offers extended warranty plans. In addition to warranty coverage, make sure you have adequate car insurance coverage.

With this car insurance comparison tool, you can receive personalized auto insurance quotes in minutes. It’s a free, easy way to compare reputable car insurance companies and the best coverage options.

Frequently Asked Questions

  • To find out whether your car is still covered by a warranty, you’ll need to know the date you purchased it and its mileage. You can check the odometer for the mileage and contact the dealer with your vehicle identification number (VIN) so they can look up the purchase date.

  • Whether you need an extended warranty depends on your particular situation. The extended car warranty cost is also important. If you think you’ll always worry that a car part will break, an extended warranty will give you peace of mind, especially if you find a good deal.

    A warranty might also make sense if you have a used car or a certified pre-owned car or if your vehicle has a reputation for expensive repairs because it’s luxurious or unique. On the flip side, if you’re confident you’re driving a top-quality car and don’t mind paying for the repair bill out of pocket in the event you do need repairs, you may want to forgo an extended warranty.

  • Even though a car warranty may be useful at some point, many people don’t end up ever using their warranty. Some also find that repair costs are less expensive than the annual costs of it. However, if you think your car will need to be repaired several times in the future and you don’t have a lot of extra cash on hand, a warranty should be on your radar.

  • It all depends on the service. If your car is still under warranty but the repair or replacement is a result of normal wear or tear or your warranty states that it won’t cover it, you’ll be responsible for the costs.

  • Some car insurance companies offer MBI, which is an add-on that pays for mechanical issues similar to those covered by extended car warranties. The caveat with an MBI, however, is that you can only get your repairs through a small dealership network. It also expires sooner.

  • Unfortunately, extended warranty calls are scams. The Federal Communications Commission found that there are more complaints related to extended car warranty scams than about any other topic. Don’t respond to an extended warranty call, as reputable car warranty companies with high ratings on the Better Business Bureau (BBB) would never call you to offer you their products.

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Anna Baluch
Anna Baluch

Insurance Writer

Anna Baluch is a Cleveland-based personal finance and insurance expert. With an MBA from Roosevelt University, she enjoys writing educational content that helps people make smart financial decisions. Her work can be seen across the internet on many publications, including Freedom Debt Relief, Credit Karma, RateGenius, and the Balance. Connect with Anna on LinkedIn.

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